Singapore Technologies Engineering Ltd's (SGX:S63) largest shareholders are private equity firms with 50% ownership, individual investors own 32%

By
Simply Wall St
Published
May 11, 2022
SGX:S63
Source: Shutterstock

A look at the shareholders of Singapore Technologies Engineering Ltd (SGX:S63) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private equity firms with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, individual investors make up 32% of the company’s shareholders.

Let's delve deeper into each type of owner of Singapore Technologies Engineering, beginning with the chart below.

Check out our latest analysis for Singapore Technologies Engineering

ownership-breakdown
SGX:S63 Ownership Breakdown May 11th 2022

What Does The Institutional Ownership Tell Us About Singapore Technologies Engineering?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Singapore Technologies Engineering already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Singapore Technologies Engineering's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
SGX:S63 Earnings and Revenue Growth May 11th 2022

We note that hedge funds don't have a meaningful investment in Singapore Technologies Engineering. Looking at our data, we can see that the largest shareholder is Temasek Holdings (Private) Limited with 50% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 5.0% and 1.8%, of the shares outstanding, respectively.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Singapore Technologies Engineering

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that Singapore Technologies Engineering Ltd insiders own under 1% of the company. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own S$76m of stock. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 32% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

With a stake of 50%, private equity firms could influence the Singapore Technologies Engineering board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 1 warning sign for Singapore Technologies Engineering that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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